In this article, we will evaluate the best crypto exchange for swing trading 2021.
We will cover which cryptocurrency exchange is best for you to swing trade on based on the following factors:
- What is crypto swing trading?
- Crypto Swing Trading Strategies
- Liquidity and Trading Volume
- Listed Trading Pairs
- Spread and Fees
- Low-cap coins with Potential
A swing trader can trade in both directions but the most common is to trade the spot market in an uptrend with no borrowed funds (no leverage). This is especially true for medium to long term swing traders.
However, the swing trading strategy is applicable to shorting the crypto market as well.
No Financial Advice, Information only. Do your own research.
Cryptocurrencies are high-risk investments.
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Best Crypto Exchange for Swing Trading Strategy
Binance is the best crypto exchange for swing trading the most common spot market since they have great trading volumes and low fees.
Kucoin is the best crypto exchange for swing trading altcoins since they have low fees and many spot markets.
Bybit is the best crypto exchange for leverage trading since they have a low funding rate.
Gate io is the best rare altcoin exchange since they have most listed cryptocurrencies spot markets listed but not the lowest fees.
What Is Swing Trading Crypto?
Crypto swing trading is a short to medium-term trading style holding the asset over a few days to several weeks.
A great benefit of swing trading over day trading is that swing trading requires less active trading. However, since the positions are held for longer, they are subject to overnight and weekend market risk.
The cryptocurrency has excellent properties for a swing trader since it has many markets and is volatile both in short-term and long-term periods.
What is best crypto for swing trading?
Bitcoin BTC is the best crypto for a swing trading strategy. However, it’s possible to swing trade Ethereum ETH and smaller altcoins. Remember, the smaller altcoin, the higher the risk is in general.
Crypto Swing Trading Strategies
There are several different crypto swing strategies but three of the most common are, catch the wave, buy the pullback and follow the crowd.
1. Catch The Wave
This swing trading strategy identifies a trend in the market to “catch the wave ” (like a surfer trying to catch the wave).
The idea here is to enter after the pullback has ended to an uptrend which is likely to continue.
2. Buy The Pullback
Instead for buying after the pullback has ended, this swing trading strategy focus on enter the market while other trader’s are taking profit and causing a pullback in price.
3. Follow The Crowd
Follow the Crowd swing trading strategy focuses on identifying the support and resistance levels for for a cryptocurrency over a given period. Asset prices often bounces between the resistance and support levels. When you have identified these levels, you simply follow the pattern. When the coin nears the upper resistance level, you take profits or enter a short position. The coin should reach this level and reverse direction again. Then, when the coin nears the lower support level, you enter a long position.
Best Crypto Exchange for Swing Trading based on Liquidity and Trading Volume
First, you need to understand the the differences between liquidity and trading volume. After this, we can describe why this is so important for you if you are about to swing trade crypto. Last we will list the crypto exchanges with the best liquidity and trading volumes.
Trading volume: Refers to the total quantity (the total number) of currency units that are traded during a given period of time.
Liquidity: Refers to the level of rapidity which a crypto can be either bought or sold in the market for its market price.
As you can see in the screenshot below, all this data can be found for each exchange on Coingecko. In this example we have Binance.
In the green square you will find a way to measure liquidity. This indicates how much volume you need to trade to move the underlying crypto +2%.
Also, you find the trading volume for each underlying crypto the last 24 h hours.
We will cover spread later in this article.
A trader is looking for high liquidity on the crypto exchanges because it creates less risk for a great slippage. In worst case, you might not be able to enter or exit the market at all if the market is very in-liquid.
Often, the liquidity correlates well with trading volume and market cap. The larger the market cap is, the higher the trading volume and liquidity.
For extremely large volume traders, such as institutions, the importance of liquidity is vital. However, for small volume traders, like most retail investors, liquidity is not a crucial factor. Still, there are small cryptocurrencies that don´t even have a $1000 volume so don´t neglect it and don´t get fooled by it.
Pros: High liquidity reduces the risk of high slippage or missing exits/entries.
Cons: Low liquidity creates high slippage and high average entry/exit price. Be careful for extreme low liquidity.
Caution: There are scam coins and even legit small coins and exchanges responsible for wash trading.
What does wash trading mean?
Founders of a cryptocurrency project can trade their cryptocurrency back and forth to trick the market there is a great liquidity and trading volume in their token.
An exchange can trade a cryptocurrency back and forth to trick customers they have great liquidity and trading volume in a specific cryptocurrency.
How to avoid being tricked by wash traded projects and exchanges?
There is no easy way to stay away completely if you are about to invest in very small cryptocurrencies. One easy rule is
- Stay to large and medium cryptocurrencies and crypto exchanges
Best Crypto Trading Exchanges - Liquidity and Trading Volume
All these crypto trading exchanges are great for swing trading since they all have among the best liquidity.
In the table below, we have compared the most liquid trading pair on most exchanges for a 24h period in the beginning of December 2021. Such data is always easy accessible on Coingecko or Coinmarketcap.
Best Crypto Exchange for Swing Trading with Leverage
You can increase you crypto purchasing power by using crypto trading leverage. However, not all exchanges support leverage trading.
In addition, leverage trading can differ a lot among different crypto trading exchanges.
There are two main reasons for a trader to use leverage
- Increase purchasing power
- Can take faster returns on smaller movements
There are different crypto leverage trading products on the market
- Futures (Perpetual futures)
- Margin Trading
- Leveraged tokens (Binance own product)
You have to decide which one your are going for before you can decide which crypto exchange is best for leverage swing trading for you.
However, we have listed a few in the table below with maximum leverage and what leveraged products are available.
Read more in our article about the best crypto leverage trading platform.
Best Crypto Trading Exchanges - Maximum Liquidity
In the table below, you find the maximum leverage for each crypto trading exchange we have listed.
Best Crypto Exchange for Swing Trading - Listed trading pairs
How to see if a crypto exchange have a crypto pair listed?
- Go to Coingecko or Coinmarketcap.
- Click on exchanges
- Find the exchange you are looking for
- Now, click and find the crypto pair you are looking for
What crypto exchanges have the most crypto pair listed?
In the table below, we have listed a few of the most famous crypto exchanges and how many cryptocurrencies they have listed.
Make sure to note that there isa slightly difference between number of currencies listed and number of trading pair listed.
If Bitcoin is listed it only counts for 1 crypto listed.
However, there can be many crypto trading pair listed with Bitcoin. Like BTC/ETH, BTC/BNB, BTC/SOL etc.
Best Crypto Exchange for Swing Trading - Spread and Fees
The spread is the difference between a buy and a sell order in the order book. In the screenshot from Binance below, you can see the difference in the cheapest sell order and the highest bid order.
Cheapest sell order: 0.0037320
Highest bid order: 0.0037290
Spread: 0.0037320-0.0037290 = 0.0000030 ($0.15 if BTC=$50.000)
However, lets says you are a big trader and want to buy 500 SOL. As you can see under the amount column the spread grows larger since the order book is relative small for each trading size. Here, you will have to pay a “higher spread” and this term is often referred to as slippage in trading.
Read more about crypto spreads in our article about the lowest crypto spread trading exchange.
Trading fees are easier to compare than spread and slippage since they are fixed and not dynamic.
Best Crypto Trading Exchanges - Trading Fees
In the table below, you find the different taker and maker fees charged by the different crypto exchanges.
Best Crypto Exchange for Launchpads
Investors and swing traders are always looking for high potential cryptocurrencies since here you can find great volatility. One way to look for such coins is to contribute or sign early projects via launchpads. High potential can make a lot of money.
However, you should always remember to weight the potential profit and the risk involved. That is one of the key points that differ professional traders from unprofitable amateurs.
Pros: With great potential, you can do a higher profit in terms of percentual gain.
Cons: When you are looking for small altcoins with high potential you need to conduct thorough research. It is very easy to fall for ICO scams or promising projects that will, most likely, fail. This is a borderline to a lottery.
Example: Bitcoin and the top cryptocurrencies offers lower potential than the most promising altcoins. Nevertheless, many altcoins don’t have any potential at all.
Conclusion – The Best Cryptocurrency for Day Trading and Swing Trading
In this crypto trading guide we went through the most important parameters to look into before you choose what cryptocurrency is best to trade for you.
There are different cryptocurrencies that might be the best to trade dependent on your requirements and strategies.
Crypto Swing Trading Strategy VS Scalping
- A scalping trading strategy often involves making hundreds of trades daily in which positions are held very short. Profits are small and the overnight risk is eliminated.
- A swing trading strategy may not require as much experience as a scalping strategy, as swing trading is usually less demanding in terms of time needed to monitor financial charts
Read more about crypto scalping in our article about the best crypto exchanges for sclaping strategy.